As Cryptocurrencies take a plunge in the market and Bitcoin goes below the $7,500 mark, Denmark’s biggest bank; Danske Bank based in Copenhagen has issued a warning against investing in cryptocurrencies.
One of the reasons given is, like any other fiat currency or real money, its either backed by the government or by the Gold standard. However, cryptocurrencies are not backed anyone or investor and consumer protection are limited to the same liabilities as fiat currencies.
The mere fact that the increase or decrease in price is determined by the hype in the market and its high volatility is the bank’s second reason. Therefore price fluctuation cannot be determined or controlled.
The obvious and most important reason is lack of transparency and regulatory control as the major reasons for their stand and the institution believes it is its obligation to assist in the fight against money laundering and other financial crimes.
Cryptocurrencies at present do not provide a sufficient level of transparency for the bank to meet anti-money laundering (AML) obligations, the notice stated.
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For these reasons, it is not possible to trade cryptocurrencies on the bank’s trading platforms. However, the bank does monitor the market closely, and if the cryptocurrency market becomes more transparent and mature, the bank might reconsider this position.
“We do not in any way want to support the investment environment surrounding cryptocurrencies,” the notice added. It has phased out the possibility of purchasing financial instruments directly related to the prices of cryptocurrencies.
Such instruments can include exchange trade notes that mirror the price of cryptocurrency, the bank noted. Such securities, it claimed, are characterized by high risk and volatility.
In compensation, the bank is providing an alternative stating that if it has to accept funds originating from cryptocurrency investments, it would treat it like every other investment transactions; meaning it must comply with the existing AML anti-procedures and regulations.
25-Year-old pleads Guilty to Running Unlicensed Crypto Exchange.
Kunal Kalra, a 25-year-old from West wood Los Angeles has been said to have pleaded guilty to federal charges of having exchanged over $25million in cash and cryptocurrencies.
Kunal, also known as “Kumar,” “shecklemayne” and “coinman,” was indicted on Friday, August 23 for allegedly trading cash and cryptocurrencies including drug dealers partially via his Bitcoin ATM kiosk.
The exchange was a front for other illegal activities
Kalra was said to have agreed to engagements in other illicit activities such asd distributionof methamphetamine, operating an unlicensed money transmitting virtual platform, laundering money and failing to maintain an effective anti-money laundering instrument.
According to an announcement made by the U.S Department of Justice last Friday, Kalra had said that he has agreed to plead guilty to the offence of converting Bitcoin for cash for criminals, drug dealers who acquired cryptocurrencies from trading narcotics on the dark web, as well as a number of other persons involved in various illicit activities. He had also confessed that he used platforms such as Localbitcoin and a company known as Paxful.
It was alleged that Kalra had been running this cryptocurrency exchange from May 2015 through October 2017. The justice department also went ahead bro say that without the implementation of an anti-money laundering program, Kalra facilities these kinds of transactions with a commission knowing fully well that the proceeds came from drug trafficking.
As at the time of this report the law enforcement agency had already seized about $889,000 in liquid cash from Kalra, about 54.3 Bitcoin and other cryptocurrencies, worth more than half-million dollars.
The announcement also said that the maximum sentence that Kalra stood a chance of facing was life imprisonment.
Legendary Bitcoin Investor Refers to Bitcoin as a Psycho Currency
Mark Mobious had referred to the worlds largest cryptocurrency as a “psycho currency”.
Although, it’s proponents could be seen to be in full support of it, there are those who still express a lot of scepticism towards its, saying that it wired, evil and a complete waste of time. For cryptocurrency enthusiasts, it is usually not a good day when legendary businessmen and investors lash out at the prospects of Bitcoin and act like it possesses no potential. In recent times, we see persons such as Mark Mobious, being a trader who founded Mobius Capital Partners, joining the ranks of Warren Buffet.
How Mobious feels about Bitcoin
According to a report from a recent interview, Mobius said that bitcoin and its crypto cousins as “psycho currencies,” claiming that spikes occur only when people believe in them. He expressed his confidence in the fact that the Bitcoin will ultimately cause other hardcore assets such as gold in a few months from now.
” I call them psycho currencies because it’s a matter of faith whether you believe in bitcoin or any of the other cybercurrencies… I think with the rise of [bitcoin], there’s going to be a demand for real, hard assets, and that includes gold.” He said.
It is noteworthy to state that it is quite difficult to take Mobious seriously as he switches sides at the drop of a hat, he had to express his scepticism about Bitcoin and other cryptocurrencies claiming that they were just pure speculations not worthy of any attention. Earlier this year he also said that digital currencies were a hallmark of the future, and could be an around for a very long time.
Gold Is Where the Money Is
“Gold’s long-term prospect is up, up and up, and the reason why I say that is money supply is up, up and up.”
He said in his comments that investors should get involved in gold regardless of the price, and pointed to the moves of mainstream banks as well, i.e. the European Central Bank, which he said serve as proof that institutions are thinking the same way.
Notorious Cryptocurrency Scams and How to Avoid Them
Cryptocurrency thefts, scams hit $1.7 billion in 2018 according to Reuters new York
People lost their Cryptocurrencies after it was stolen from exchanges and after being scammed which was a massive increase of more than 400 per cent from the figures recorded In 2017 to about $1.7 billion, according to a report from U.S.-based cybersecurity firm CipherTrace
The growth of blockchain and cryptocurrency over the past nine years has changed the way the world looks at transactions and this has made a massive attraction for scammers and criminal who have tweaked their schemes to suit cryptocurrency making people run into heavy losses. There move has to be aided with the fact that Cryptocurrencies are decentralised virtual peer-to-peer currencies. This means that the currency exists online only and is not controlled by a bank, treasury or country, making it free from regulation and government over sight.
Whether or not you believe cryptocurrency is the “IT”, we can both agree to the fact that frantic investments attract crafty individuals seeking to prey on trader greed. That is, the prospect of quick riches can blind some people to the risks and enable crooks to lure them into scams with dubious products and services. Here are some of the most notorious cryptocurrency scams and how to avoid them.
- Social media give away fraud
Anyone can be prey to hackers, even legitimate coin issuers. Sometimes notable figures in the crypto space such as Vitalik Buterin or Andreas Antonopoulos, and many others that offer giveaways are impersonated. You cannot trust Facebook or Twitter accounts, especially unverified accounts. If a person claims to belong to an ICO or to be its founder, think twice before you reply to their offer or make a contribution. Whenever you read “Send 2 or 3 ETH to this address and receive up to 20 ETH in return”, that is a pure scam. Crypto is money and nobody is giving away good money for free. If someone is truly promising you a tenfold reward, be realistic – it is too good to be true? Before you actually send money to the person, make sure the source is real and trustworthy. You could also look through the company’s website, read comments about it from reliable sources, and, most importantly, try to make contact with real employees on Telegram or other social media channels to figure out what is truly going on.
- Fake Initial Coin Offerings (ICOs)
ICOs are a means of raising funds for newly launched cryptocurrencies. Investors in ICOs receive tokens in the new cryptocurrency. Over the past year, Investors have pushed billions of dollars into more than 1,000 ICOs. While many ICOs are legitimate, a large number have no real business plans or technology behind them. In a recent study, 80% of the ICOs conducted in 2017 were described as scams. The US Securities and Exchange Commission (SEC) recently filed fraud charges against two ICOs, stating that they were sold on the basis of fraudulent claims. China has also banned the sale of ICOs, and many individuals familiar with fraud have described Initial Coin Offerings as the biggest scam ever. Fake ICO scams can be found here.
- Fake websites
Phishing attacks are very common cryptocurrency scams. The main strategy is imitating popular exchanges by purchasing web domains and Google ads. This fake website may look similar to the original, but once you type in your credentials, it directs you to a special platform to proceed with your contribution. Fake webpages can be identified by the appearance of tiny dots beneath the URL characters. Also, the absence of “Secure” and “https” markers before the website’s URL can be a warning sign of a fake site. It is often advised to type the exchange URL directly into the address bar yourself. Also, ensure you enable some sort of multifactor authentication for all your accounts. This may seem too much, but adequate security demands extra measures.
- Ad scams
We should take caution of ads leading to phishing sites. Recent examples of such ads include Google Ads to cloned exchanges and Reddit ads to Trezor hardware wallet sale offers. Its common practice to always bookmark the legitimate URL and not to visit other URLs even if they look similar. Chrome extensions like Metamask block phishing sites.
- Fraudulent Emails
Scammers often send emails announcing fake ICOs, enabling them to steal a significant amount of money. It is not quite difficult to impersonate a real cryptocurrency issuer, it’s important to have this in mind and remain sceptical of emails concerning ICO.
If you do receive any of such email, pull up any previous emails received from the company and compare the layout and signatures. Also, be on the lookout for grammatical errors and ensure that the email address has been verified by the official website.
Your approach to the security of your investment will determine your success in it, as there are a lot of ways cryptocurrency can benefit your business as long as you proceed with a reasonable degree of scepticism and care. Despite the growing number of fraudulent projects, there are numerous prestigious projects and groups that make investing in cryptocurrency worthwhile. It is a surety that fraud is prevalent wherever big money is involved, and these scammers tend to use more or less the same tricks, each adapted to fit new scenarios.
Thus whenever you are visiting a new website, see something that looks too good to be true, or you are accessing information using your private details, be cautious.
Security measures are fundamental: Trust only authentic websites and cryptocurrency exchanges, and be suspicious of crypto mobile apps and all emails promoting an ICO.
Renowned Basketball Team Owner says that he Sees Bitcoin and Gold as the same.
A billionaire and owner and owner of the Dallas Mavericks professional basketball team Mark Cuban, had issued a statement saying that be dislikes hold as a form of investment and basically sees Bitcoin and Gold as the same thing.
Cuban had said this in an interview with Kitco News on August 9. He also made reference to the Bitcoins as having a definite supply which in his view was awesome and adds more to its value.
“They’re both collectables. The value is based off supply and demand. And the good news about Bitcoin is there’s a finite supply that’ll ever be created.”
He expressed his deeply rooted prejudice for the precious metal while and expressed totally, his view of it. He specifically said that:
“Hate with extreme prejudice is not enough. Hate with double-extreme prejudice with an ounce of hot sauce.”
Gold Vs digital gold
It is still unclear how the term “digital gold” which refers to Bitcoin had gained this much recognition in the space. However going back in time in a bid to retrace its origin, we could legitimately make reference to a time when The New York Times journalist Nathaniel Popper published his book “Digital Gold” back in 2015. And seeing that Bitcoin had successfully rivalled the precious metal, the name stuck.
We could see now that in 2019, the response has been seen by experts as to whether or not they should Bitcoin should be seen as Gold o the digital world. The head of communications at the Zcash Foundation, Sonya Mann, made reference to its finite supply as well as demand and supply factor, from her remark it had seemed that she happens to be more optimistic about the digital currency than Cuban:
“Bitcoin is deflationary by nature, due to the capped 21 million supply and the clever incentive structure that has reliably safeguarded its inviolability. The emergent order governing Bitcoin, as both a software product and a phenomenon, is undeniably path-dependent, attributable in large part to Satoshi Nakamoto’s design decisions. There is no guarantee that BTC will increase in value, but past trends and the underlying supply-demand dynamics suggest that it’s a reasonable long-term prediction.” She had said.
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